1.12.1 COSTS

Most firms include a requirement within their definition of pro bono that the work be done either at no cost to the client, or at a significantly reduced fee. All standard definitions of pro bono legal work exclude work done on a speculative or contingency basis (‘no win, no fee’), under which, in the event of a successful litigation outcome, the firm charges the client a commercial fee. The Centre’s definition for the purpose of the National Pro Bono Aspirational Target and National Law Firm Pro Bono Survey states that pro bono legal work is ‘giving legal assistance for free or at a substantially reduced fee’ and excludes ‘contingency fee arrangements or other speculative work which is undertaken with a commercial expectation of a fee’.1

These definitions of pro bono legal work do not deal with the issue of costs orders made by courts in favour of pro bono clients, or provision for legal fees in settlements. Some firms may choose not to seek to recover their costs through these cost orders (in the limited range of pro bono matters where costs orders can be made) but most take the view that failing to do so merely unduly advantages the other party.

The key issue is not so much the actual recovery of costs but ensuring that a level playing field exists for all parties in relation to their exposure to the risk of paying the other party’s costs. Without this level playing field, the party being represented on a pro bono basis is at a significant disadvantage when it comes to negotiating a settlement offer.

Firms that wish to be able to recover costs through a costs order or settlement may state in their policy that pro bono legal work includes work done ‘without expectation of payment by the client’, meaning that fees may be recovered from the other side but not from the client. Where pro bono legal work is done on a ‘conditional’ cost basis, no fees are charged unless costs are recovered by the client pursuant to a court or tribunal order or as part of a settlement. In that event, the firm is entitled to an amount up to the amount recovered by the client.

If the matter is litigious and the firm intends to seek a costs order, this must be communicated clearly to the client at the engagement stage and should be dealt with in the letter of engagement.2

1.12.2 RECOVERY OF COSTS

COSTS AGREEMENTS AND THE INDEMNITY PRINCIPLE

The purpose of a costs order is to compensate the successful party in litigation for those costs necessarily incurred to obtain justice (the indemnity principle). However, as a point of general law the indemnity principle can only operate where a successful litigant is under an obligation to pay their lawyer.

Where a party to an action has an agreement with their legal adviser that they do not have to pay any costs, then the general law principle states that that party cannot recover party and party costs against their adversary.3

This is a key concern in the context of pro bono representation since the successful party does not need to be compensated where no loss has been incurred. Although all courts have a broad discretion as to whether to make costs orders, a court may order that a litigant who is represented pro bono cannot recover their costs even if their claim is successful, whilst still being liable for the other party’s costs if their case is unsuccessful. Conversely, an opponent of a litigant who is represented pro bono may benefit from not having to pay their opponent’s costs, even if they are unsuccessful.4 This creates an uneven playing field and puts the party who is represented on a pro bono basis at a disadvantage in negotiations.

In a number of proceedings the issue has arisen as to whether, in view of the indemnity principle, the terms of the pro bono client’s representation enabled the court to make costs orders in the client’s favour. Costs agreements between pro bono clients and their lawyers often include a ‘condition subsequent’, under which the client only has to pay the lawyer if they are able to recover costs from the other party. However, the indemnity principle operates to award costs only if, at the time of judgment, the client already has an obligation to pay costs that will be incurred, as a ‘condition precedent’ to the solicitor acting. Following the judgment of Basten JA in the NSW Court of Appeal case of Wentworth v Rogers,5 the Queensland Court of Appeal held in King v King6 that a clause in a pro bono costs agreement which provided for costs to be waived by the firm unless the client was successful (in which case the firm was authorised to seek recovery from the other side) was invalid as it was a condition subsequent.

Following King7 some firms varied their engagement letters or costs agreements to provide for costs to be payable unless the client was unsuccessful, while others took the view that their letters should be in the form required for conditional costs agreement for the purpose of the legal profession regulatory provisions in each State.8

In 2014 the Victorian Court of Appeal in Manieri v Cirillo9 upheld a pro bono costs agreement that provided for the recovery of costs under an order made if the client was successful, stating that the distinction between a condition precedent and a condition subsequent was ‘a triumph of form over substance’.

Since the decision in Manieri, lawyers have sought to overcome the difficulties posed by the indemnity principle through the use of a particular form of conditional fee arrangement whereby the client is required to contractually agree to be bound to pay their lawyer in the event of being successful and being awarded a costs order.10 The experience of the Centre is that these costs agreements have generally been successful in establishing an indemnity relationship sufficient for the court to make a costs order.

While Manieri is a positive development, the law on this point remains uncertain, leaving lawyers unsure as to whether to expect a costs order to be made in favour of a successful pro bono litigant. This in turn creates an uneven playing field in negotiations between the parties. It would be desirable for legislation to clarify the court’s power to award costs in pro bono matters, regardless of whether the client has contractually indemnified the lawyer for costs. Legislation would also reinforce the distinction between matters taken pro bono and matters taken on a speculative/no-win-no-fee basis.11

Legislative reform in this area has already taken place in the United Kingdom. ‘Pro bono costs orders’ may be made by the courts in the UK that require the other party to make a payment, which is ‘in respect of’ the successful litigant’s pro bono representation, to a charity prescribed by the Lord Chancellor.12 The prescribed charity has been The Access to Justice Foundation since its establishment in 2008. The Foundation enables the provision of more legal services through distributions to Regional Legal Support Trusts, national pro bono organisations, and strategic projects. The UK approach balances competing policy considerations. The spirit of pro bono is maintained because lawyers who agree to work pro bono do not end up receiving a fee, while the deterrent value of costs is also maintained as unsuccessful litigants are not relieved of the obligation to compensate the successful party.

WHAT TO DO WITH RECOVERED COSTS

Some firms, particularly those with a strict financial pro bono budget, will re-allocate recovered costs to the pro bono budget, allowing for more pro bono legal work to be done in total. Other options include allocating the funds to paying disbursement costs for future pro bono clients, or donating the money to the client (often a charity) or to another community legal organisation dedicated to pro bono legal work.

Following consultation with firms on this issue, the Centre suggested in a submission to the Productivity Commission’s Access to Justice Arrangements13 inquiry the introduction of a self-regulatory protocol, to which pro bono providers would subscribe, which might indicate that recovered monies should be:

used to pay counsel’s fees and other disbursements; and/or

reinvested into a firm’s pro bono program; and/or

donated to a charity or community organisations of choice (which might be the applicant organisation in the litigation, or a co-counsel organisations such as a CLC or PBRO).

The rules of several Australian courts establishing court-based referral schemes explicitly entitle a practitioner to recover costs and disbursements if a costs order is made in favour of the pro bono client, and ‘to the extent that the party against whom the order for costs is made in fact pays the costs’.14 These provisions apply only if a referral is made under the relevant court’s scheme.

1.12.3 DISBURSEMENTS

The cost of disbursements incurred when carrying out pro bono legal work can act as a significant barrier to undertaking pro bono legal work, especially in smaller firms.

The 2014 National Law Firm Pro Bono Survey found that disbursements are a significant factor when firms are assessing their decision to provide pro bono legal assistance, and may therefore affect their decision to provide that assistance.15

Types of disbursement costs which may become prohibitive include travel, interpreters and retaining experts. A matter that requires significant amounts in these categories may be unattractive for a pro bono practice.

Firms should decide on a policy position for charging for internal disbursements (such as postage or photocopying) and external disbursements (such as court filing fees), in pro bono matters, and should state this position in the firm’s pro bono policy and procedure documents. Even if the firm’s policy is that decisions on disbursements are to be made on a case-by-case basis by the supervising partners, this should be reflected in the firm’s policy and procedures documents so that all staff are aware of this position.

Firms should also be aware of the available disbursement assistance schemes and exemptions: see 1.12.4Disbursement Assistance.

Firms may decide on a number of ways of handling disbursements. In some firms this may change from matter to matter, depending on the ability of the client to bear those costs. Approaches include:

charging no disbursements (meeting the cost of both internal and external disbursements);

not charging for internal disbursements and charging only for external disbursements (for example, court filing fees);

charging for internal disbursements and/or external disbursements only above a certain cap; or

charging both internal and external disbursements.

In some costs agreements for litigious matters, provision may be made for disbursements to be payable only if there is a successful outcome and they are covered by the costs order.

As with costs, the arrangements for disbursements should be communicated clearly to the client, and set out in the letter of engagement or costs agreement. Firms should explain to the client what kind of costs are disbursements, and whether the pro bono client will be responsible for these. It is important that the pro bono client be consulted, and agree to, any liability for disbursements as they arise. The client should be informed whether the firm considers that such expenses are necessary for the continuation of the matter.

Ideally firms should consider maintaining a degree of flexibility as regards the payment of disbursements. For example, many firms in their pro bono policies choose to confer a discretion on the pro bono committee, pro bono coordinator or supervising partner to pay a client’s disbursements in cases where the client is not in a position to pay for them and there is no disbursement funding available.

1.12.4 DISBURSEMENT ASSISTANCE

This section provides information about possible ways to reduce the impact of these costs through:

the exemption and waiver of court and tribunal fees; and

disbursement assistance schemes.

COURT AND TRIBUNAL FEES — EXEMPTION AND WAIVER FOR PRO BONO MATTERS

Firms undertaking litigious pro bono matters should consider whether exemptions or waivers are available for court or tribunal fees, such as filing fees and, in some cases, setting down and daily hearing fees.

The Acts, regulations or rules for some courts and tribunals expressly provide for fee exemption, waiver, remittal or postponement of fees for certain categories of persons. Even if there is no express provision, a waiver may nonetheless be available.

For example, those liable to pay fees in Commonwealth courts (the High Court, the Federal Court of Australia, the Federal Circuit Court and the Family Court) and the Administrative Appeals Tribunal are eligible for an exemption from, or reduction of, those fees if the person:

has been granted legal aid;

is the primary holder of a particular benefit or concession card;

is younger than 18 years;

an Independent Children’s Lawyer appointed to represent a child’s interests in proceedings under the Family Law Act 1975 (Cth);

is imprisoned or detained in a public institution;

is in receipt of a youth allowance, Austudy or ABSTUDY benefit; or

(or body) has been granted assistance under Part XI of the Native Title Act 1993(Cth).16

Applications for waiver must be accompanied by supporting evidence which is relevant to the grounds for exemption. Once a general exemption is established, the waiver will remain in place until the proceedings are finalised. A person who has been granted a general exemption must notify the court if there is any change in circumstances that would alter their entitlement to the exemption. Applications for fee exemption are available on request from each District Registry.

If a person is unable to demonstrate their entitlement to a general exemption, they may nevertheless apply to the registrar for a waiver of fees. Fees can be waived if the registrar (or another authorised officer) is of the opinion that payment of the fee would cause financial hardship, having regard to the applicant’s income, day-to-day living expenses, liabilities and assets.17 Unlike the general exemption, a financial hardship exemption does not apply on an ongoing basis meaning that requests from the recipient must be considered afresh on each occasion a fee is payable in the proceedings.

As mentioned above, some State and Territory courts and tribunals, upon application (generally accompanied by a supporting affidavit or statement of financial affairs), provide for a waiver of the payment of fees, either pursuant to a general discretion or specifically in the case of financial hardship. Each court and tribunal has its own criteria for assessing applications for waiver and they generally have their own application forms. For example, in the Supreme Court of South Australia, an application for a fee waiver must set out, among other things, whether the applicant might be receiving assistance from another source such as a spouse or trust fund, and provide financial information about that person or entity.18

In New South Wales, in addition to general waiver provisions, pro bono-specific provisions have been inserted in regulations for the Supreme Court, Land and Environment Court, District Court and Local Court. Pursuant to these provisions, the payment of fees by a pro bono or legally assisted party is postponed until judgment is given, and fees are not payable at all if judgment is against the party,19 or judgment is in their favour but damages are not awarded (or only nominal damages are awarded) in their favour or costs.20

A ‘pro bono party’ is defined as a person who is represented under a pro bono scheme of the Law Society of New South Wales, the New South Wales Bar Association, or a pro bono scheme established by rules of court. A legally assisted party includes a party who is receiving legal assistance assisted through a community legal service within the meaning of the Legal Profession Uniform Law (NSW). The lawyer or barrister acting for the party must certify in writing to the relevant court that the party is being so represented and must undertake to pay certain fees in the event that the concession does not apply.21

Further information and forms for fee exemptions and waivers can be obtained from court and tribunal registries. The following resources may also be helpful:

The NSW Department of Justice has published a fee exemption and waiver guide for NSW Supreme, District and Local Courts which is available online.22

The Legal Services Commission of South Australia has published a court and tribunal fee waiver guide covering all South Australian Courts, as well as the Federal Courts and Tribunals, which is available online.23

LawRight has produced a suite of Factsheets which provide details on fee waivers and reductions in the Queensland Courts, in the Administrative Appeals Tribunal, the Federal Court, the Federal Circuit Court and the High Court, which are all available online.24

ADVOCACY FOR A GENERAL PRO BONO EXEMPTION

Anecdotal evidence from law firms and PBROs around Australia indicates that most low-income Australians who are represented on a pro bono basis are exempt from the payment of fees. However, those who are being represented on a pro bono basis but do not fall within the above exempt categories, for example asylum seekers, must seek a waiver or deferral of the payment of the relevant fee.

While those who do not fall within the exempt categories can request the court or tribunal to exercise its ‘financial hardship’ discretion, on the basis that payment of the fee would cause them to suffer financial hardship, this can be a lengthy process with uncertain prospects of success. People already experiencing disadvantage may find the process difficult as it requires completion of a lengthy statement of financial position and attesting in an affidavit to the veracity of the information provided.25

The Centre is advocating for the introduction of a new fee exemption category for clients who are being represented on a pro bono basis, limited to certified pro bono assistance schemes, prescribed in regulations, or cases where the pro bono lawyer certifies that they are acting pro bono and their client cannot otherwise afford legal representation.26

DISBURSEMENT ASSISTANCE SCHEMES

Limited disbursement assistance is available for pro bono matters. There are currently nine different disbursement assistance schemes operating in Australia: at least one in each State and Territory with the exception of the Australian Capital Territory, and a separate scheme for Commonwealth law matters. However, only the New South Wales and Commonwealth disbursement assistance schemes have been established specifically to fund disbursements in pro bono matters. Other State and Territory based schemes provide assistance in a range of litigious matters.

This section outlines the existing disbursement assistance schemes relevant to the Commonwealth and each State and Territory jurisdiction.

Disbursement assistance schemes may help to address the barrier to pro bono assistance presented by the cost of disbursements. However, many of the schemes are subject to limitations that reduce their accessibility, such as an application fee, or a condition that an application can only be made once the disbursement has been incurred. Other limitations include caps on the amount that can be recovered, means and merits tests, and conditions that limit assistance to cases where damages are likely to be recovered.

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COMMONWEALTH LAW MATTERS

On 1 July 2012, the Commonwealth government introduced the Disbursement Support Scheme to provide financial assistance to litigants unable to cover disbursement costs in Commonwealth civil litigation matters.

The scheme is not available for criminal matters, State or Territory legal matters or overseas legal matters.28

The scheme covers costs including, but not limited to, disbursements for expert reports, photocopying and witness fees, court transcripts and interpreter fees.29 There are caps on the amount of assistance that will be provided for certain disbursements.30

No assistance will be contributed towards legal representation fees, travel expenses or filing fees in jurisdictions where the relevant court is able to waive all or part of the filing fee. The scheme does not give an indemnity for costs that may be awarded against the applicant.31 No assistance will be granted under the scheme for people who are receiving, or are eligible to receive, a grant of financial assistance through a legal aid commission or under another scheme administered by the Attorney-General’s Department.32 Other restrictions on eligibility can be found on the Department website.33

To be eligible for assistance, the applicant must show that total expected disbursement costs will be in excess of $500.34 In assessing the application, the Department will have regards to the applicant’s financial circumstances and whether the applicant is able to meet the cost of legal action without incurring serious financial difficulty. Circumstances which may be taken into account include the applicant’s income, assets, liabilities, expenses, and standard of living. Regard will also be had to the relative merit of the applicant’s claim.35

If an application is successful, the Department will enter into a Grant Agreement with the recipient, specifying the maximum amount of financial assistance available under the grant in relation to a particular type of cost. Grant Agreements do not provide funding retrospectively and will usually provide funding in six month blocks. The Department does not pay disbursements incurred directly; throughout the litigation, the recipient will pay the disbursements incurred, which will then later be reimbursed by the Department.36

Application Forms and further details about the Commonwealth Disbursement Support Scheme are available on the Attorney-General’s Department’s website.37

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STATE AND TERRITORY SCHEMES

Relevant State and Territory schemes are outlined below. A number of schemes are limited to providing assistance in relation to cases handled on a ‘no win — no fee’ basis and which are likely to result in the payment of compensation or damages.

Before applying to any disbursement assistance schemes firms should determine whether the client may be eligible for legal aid (see Chapter 3.1Legal Aid Commissions) as in most cases disbursement assistance will not be available to people who would otherwise qualify for legal assistance. In some jurisdictions a grant of legal aid for disbursements only (provided the client is eligible for aid) may be possible.

There is no scheme in the Australian Capital Territory offering disbursement assistance. Lawyers engaged on a pro bono basis must contact and seek the approval of the ACT Pro Bono Clearing House before charging any disbursements to a client who has been referred by the ACT Pro Bono Clearing House.

New South Wales

The New South Wales Law Society administers the Pro Bono Disbursement Assistance Trust Fund, which reimburses lawyers for properly incurred, ‘necessary and reasonable’ disbursements in pro bono cases referred under the Law Society’s Pro Bono Scheme.38

As at April 2016, the total repayment of disbursements by the Fund will not exceed $7,500 for Supreme Court and District Court actions, $3,750 for Local Court actions and $5,500 for matters in other jurisdictions. The Fund will cover medical and professional reports, registration fees, translation and transcript fees, travel expenses and conduct money. Court filing fees will only be reimbursed if the applicant was unsuccessful in obtaining a waiver or postponement. There is an upper limit of $750 per medical report and $550 per professional report. The Trustees will only consider reimbursing disbursements in excess of this limit where the lawyer explains in writing why the fee is higher than the prescribed amount and why it is necessary to engage a particular professional. In certain exceptional circumstances, which are supported in writing, sundries such as general office expenses, photocopying and agency fees will be reimbursed. The Fund does not cover Counsel’s fees.39 To retain Counsel on a pro bono basis, consider applying to the NSW Bar Association’s Legal Assistance Referral Scheme.40

A formal application must be made to the Fund’s trustees detailing the relevant disbursements and receipts. An application to the Fund must include the client’s signature, unless exceptional circumstances prevent the signature from being obtained. In most cases, this application will be made at the conclusion of the matter. In prolonged matters, applications for payment may be made on an ongoing matter, although payments will not be made more frequently than quarterly. If the client is successful in their action and recovers costs, the total value of disbursements paid by the Fund will need to be repaid to the Fund.41

Enquiries should be directed to the Pro Bono Scheme, Law Society of New South Wales.42

Northern Territory

The Northern Territory’s Contingency Legal Aid Fund (CLAF) provides financial assistance to eligible persons who are unable to cover the reasonable cost of disbursements and out of pocket expenses incurred during the course of civil litigation.43 Financial assistance is only available for litigation conducted in the Northern Territory, unless the cause of action arose in the Northern Territory.44

Funding is available to enable a person to bring or defend a proceeding and covers such items as stamp duty, service fees, expert witness reports, travel expenses and expert witness court attendance fees. The CLAF does not cover lawyer professional fees. Without specific authorisation, it is not able to cover Counsel’s fees or reimburse sundries.45

All applications for financial assistance should be made out to the CLAF Fund Manager. A processing fee of $220 (GST inclusive) will attach to each application, although this can be waived at the discretion of the Fund Manager. Applicants are required to disclose their full financial circumstances to the Fund and undertake to inform the Fund of any significant variations in financial circumstances. Each application will need to be accompanied by a supporting letter from the applicant’s lawyer detailing the nature and anticipated cost of the disbursements, the merits and prospects of success of the proposed proceeding and the expected quantum.46

All applications are assessed by a Legal Aid Committee. The Committee will consider each application in light of whether the applicant meets the financial criteria for a grant of assistance, whether the case has a good prospect of success, whether the applicant has previously received the CLAF’s assistance and whether granting assistance will support litigation of general importance. The Committee may reject or postpone the application if it appears that the applicant may be eligible for legal aid.47

If financial assistance is granted, the applicant is required to enter into a Litigation Support Loan Contract (Loan Contract) with the CLAF.48 The Loan Contract will specify the terms and conditions of assistance, the type of expenses that will be covered, and the maximum amount for which CLAF’s liability for those expenses will be capped.49 Having regard to the applicant’s financial circumstances, the Loan Contract may stipulate that the applicant contribute to the expected cost of disbursements. This contribution requirement may be varied at any point by the Committee.50

In the absence of exceptional circumstances, assistance will be provided from the date of receipt of the application and will not be granted retrospectively. Funding is granted in stages, meaning that the assisted person will need to apply to the Committee for further financial assistance at the conclusion of each stage of litigation. The Committee reserves the right to vary the amount of contribution based on a change in the merits or expected cost of the case.51 The Committee may also suspend, cancel or terminate any assistance.52

The CLAF operates on a self-funding model. This means that all assisted persons are required to repay the total value of funds advanced by the CLAF over the course of litigation. Applicants who are successful in their claims will also be required to pay an additional contingency fee, a pre-determined percentage of the assistance actually advanced by the Fund during the course of the litigation. Unsuccessful litigants are not required to pay this additional fee.53

Further information and application forms are available from the Fund Manager at the Northern Territory Legal Aid Commission.54

Queensland

Civil Law Legal Aid Scheme

The Civil Law Legal Aid Scheme (CLLAS) provides grants of aid to enable financially disadvantaged people to meet the reasonable cost of outlays associated with civil litigation.55 For a grant to be made, the civil claim or action must be dealt with by the Queensland Courts or Tribunals.56

The CLLAS will consider funding any civil litigation but will give priority to matters involving children or matters where, if not litigated, the applicant would lose their home or livelihood. Assistance will not be granted for environmental impact or development claims, disability compensation claims, motor vehicle property damage claims, class actions, family property claims or claims that fall solely under Commonwealth law.57

Professional legal fees and counsel fees are not considered to be outlays and are not funded under CLLAS. However, if the CLLAS requires an opinion from counsel on quantum or liability, the cost of the opinion may be considered an outlay and may be funded by CLLAS at its discretion.58

Only applicants represented by an approved legal practice are eligible for a grant of aid under CLLAS.59 These legal practitioners must undertake to represent the client on a speculative, or ‘no-win-no-fee’, basis.60 Applications for assistance must be lodged by the approved legal practitioner on behalf of the client and must be accompanied by a supporting letter to allow the CLLAS to assess the merit of the proposed claim. Applicants must include a summary of the basis of the claim, information regarding the supporting evidence, an itemised list and estimated cost of outlays, an estimate of quantum for the claim and the matter’s prospect of success.61 There is no processing fee attached to lodgement of an application.

All applications are considered by Legal Aid Queensland and the Public Trustee of Queensland.62 All applications must meet the means and merits tests.63 To qualify for a grant of assistance, an applicant must be financially eligible under Legal Aid Queensland’s means test guidelines, except in relation to equity in their home. An applicant may have equity in their home of up to $320,000.64 Taking into account the applicant’s financial assets, the CLLAS may require the applicant to pay an initial contribution, calculated in accordance with the initial contribution tables provided by Legal Aid Queensland.65 The applicant must also show that they are not eligible for legal aid in Queensland.66 To satisfy the merits test, the claim should have a reasonable prospect of success, be of the kind that a prudent self-funding litigant would pursue, and have an expected quantum of more than $20,000. Consideration may also be given to whether the applicant will suffer a disadvantage if aid is not granted by the CLLAS and to the financial resources of the CLLAS at the time the application is lodged.67

If an application is approved, the scheme will cover the costs of the disbursements identified in the budget forecast provided as part of the application.68 In exceptional circumstances, retrospective aid may be granted.69 A grant of aid may be varied or terminated in certain circumstances at the CLLAS’ discretion.70

At the conclusion of the matter, the applicant is required to repay to the CLLAS the total amount of the funding provided if there is a successful outcome.71 If a claim is unsuccessful or a settlement order or judgment cannot be enforced, the applicant is not required to refund the CLLAS. The CLLAS will not pay any orders made by the court requiring the applicant to pay the other party’s legal costs.72

More information about the CLLAS is available either by contacting the Coordinator, Civil Law Legal Aid Scheme or on the Legal Aid Queensland website.73

LawRight Disbursement Fund

LawRight has a limited disbursement fund, which is available to member law firms, barristers and CLCs who have agreed to act for a LawRight client on a pro bono basis and where the client cannot meet disbursement costs.74 If the applicant’s litigation is successful, or they obtain alternative funding, they will be required to reimburse the fund.75

The Law Society of South Australia’s Litigation Assistance Fund (LAF) is a not-for-profit charitable trust that operates to assist under-resourced people with meritorious claims. Grants of LAF assistance are limited to circumstances where a civil claimant seeking compensation or damages would be otherwise unable to meet the fees and/or disbursements associated with their claim. The LAF is unable to assist in family law or de facto relationship matters, or with criminal matters.77 In some circumstances, South Australian lawyers are required, under Rule 16A of the Australian Solicitors’ Conduct Rules, to inform their clients about LAF funding.78

Funding assistance is limited to litigation, proposed or actual, within South Australia; the LAF does not approve applications for litigation outside South Australia unless the cause of action arose in South Australia. Applicants must be residents of South Australia at the time that the cause of action arose.79

Applications for funding assistance are prepared and lodged by the claimant’s lawyer, and both the lawyer and the applicant must sign the form. The lawyer is required to prepare a letter setting out the appropriateness of the LAF supporting the intended action and provide primary material to this effect. A fee of $100 is attached to the lodgement of an application. For urgent applications, a fast-processing fee of $250 will be charged. Both application fees are waived for claimants who hold either an Automatic Issue Health Card or a Pension Card.80

Applications for funding assistance are subject to a means and merits tests. The applicant is required to disclose full financial circumstances, based upon which the Fund Manager prepares a report for the Assessment Panel. There is no income limit for applicants; rather, the test is whether or not they can reasonably meet the cost of the proposed litigation. The Fund Manager makes a decision about whether legal aid should be pursued instead, rather than the onus being on the applicant. After the Fund Manager’s assessment is made, the application is assessed by the Assessment Panel.81

Types of funding

The LAF provides two types of funding: full funding and disbursements only funding (see below). While the two types share common procedural requirements, claimants must understand the distinction between the two types to receive appropriate assistance.

The LAF operates on a ‘self-funding’ model meaning that it receives a small percentage of the damages recovered by the claimants whom it assists. The type of assistance rendered — full funding or disbursements only funding — will determine the amount of damages a successful litigant must pay into the LAF.82

(a) Full funding

In full funding matters, the assisted person receives funding to cover both costs and disbursements. A successful application for full funding will pay the legal costs of an assisted party on an ordinary ‘solicitor/client’ basis on the appropriate Court scale. The LAF does not pay costs on a ‘solicitor/own client’, or full indemnity, basis.83

If the applicant is successful in their claim, they are required to repay any costs paid by the LAF, in addition to 15 percent of damages received. If the applicant is not successful, they are not required to repay the LAF. The applicant will be responsible for paying costs awarded in favour of the other party.84

(b) Disbursements Only Funding

Disbursements Only Funding assists claimants in meeting disbursements such as court filing fees, medical and other expert reports, witness fees, transcript and trial fees.85 The LAF does not pay lawyer or counsel fees. Assistance is granted on an agreed scale to a fixed stage in the proceedings. Disbursement assistance may be limited to the investigation of the claim and drafting and filing of Summons, or extend to the pre-trial conference, trial or post-trial stages. At the conclusion of each stage of litigation, the assisted person may apply to extend the assistance to cover the next stage of the proceedings. Any disbursement exceeding $1000 must be approved by the Fund Manager before being incurred.86

To be eligible for disbursement only assistance, claimants must show that they have entered into a contingency agreement with their lawyer.87

If the litigation is successful, the applicant will be required to repay the money outlaid for disbursements, in addition to a fund fee levied on the value of disbursements paid out by the LAF. This fee will be between 25 percent and 100 percent of the original outlay and is determined by the Assessment Panel.88 If the applicant is unsuccessful they will not be required to repay the LAF.89 While the mandatory contingency agreement absolves the applicant from paying client-solicitor fees, the applicant remains responsible for paying the other side’s costs.90

Further enquiries in relation to both types of funding should be directed to Law Society of South Australia.91

Tasmania

The Civil Disbursement Fund (CDF), administered by the Legal Aid Commission of Tasmania (Commission), provides financial assistance for disbursements incurred in the course of civil litigation. Assistance will be granted to Tasmanian residents, irrespective of whether the applicant is eligible for legal aid.92

Priority is given to serious personal injury claims, including workers compensation claims, with other cases assessed against competing resources and priorities. Further priority will be given to applicants who are seeking a settlement of damages and whose case has a high likelihood of success.93 The CDF does not receive applications for criminal matters, family or de facto matters, or proceedings before the Resource Management and Planning Appeals Tribunal.94

The types of expenses covered by the CDF include, but are not limited to, court filing fees, medical and expert reports, interpreter’s fees, conduct money, witness’s expenses, transcript fees, trial fees, lawyer’s travelling and accommodation fees. Lawyers’ and Counsel’s fees, and sundries, are not covered by the Fund.95

The CDF is not available to self-represented litigants. Applicants must be represented by a lawyer acting on a contingency fee basis, a pro bono basis, or reduced or delayed fee basis.96

There is a $200 application fee to accompany all applications for CDF funding.97 The fee will be refunded in cases where the application fails the means or merits test, or where there are insufficient funds to make the grant.98 Each application is considered upon its individual merits.99 Each review will take into account the prospects of success, the quantum of damages and the likelihood of recovery.100 While there is not a strict means test, the applicant must be able to demonstrate, with supporting documents, that at the time of the application, he or she is unable to pay the disbursement costs associated with their legal matter. If it appears to the Legal Aid Commission that the applicant may be eligible for legal aid, the Commission will inform the applicant of this possible entitlement before determining whether or not to grant CDF assistance.101 Having regard to the applicant’s financial circumstances, the Commission may require the applicant to contribute to the cost of outlays.102

The Commission reserves the right to vary the assistance at any time after the approval of an application.103 Assistance is granted in set stages as follows: investigation of claim to drafting of originating process, filing to pre-trial conference, trial phase and post-trial procedures. At the conclusion of each of the listed stages of litigation, the applicant may apply to extend the assistance to cover the disbursements for the next stage of the proceedings.104

It is a condition of assistance that the recipient repays the CDF the cost of all disbursements incurred by the CDF on their behalf. Disbursements are to be repaid in full plus a premium applied. The premium is set by the Commission at the matter’s commencement, with a 30% premium applied to all medical negligence cases and a 20% premium applied to all other cases. The Commission will fix the premium with regard to factors including the level of risk to the disbursement being repaid, the likelihood of success of the action involved, and the likely time before the disbursement will be repaid.105 The Commission will not be responsible for any costs awarded against the applicant.106

Further enquiries about the fund should be directed to Legal Aid Commission of Tasmania.107

Victoria

Law Aid is a scheme jointly administered by the Law Institute of Victoria and the Victorian Bar Council that provides disbursement assistance to legal practitioners who represent clients on a pro bono or contingency basis. Law Aid is only available for civil litigation matters and is not accessible to clients involved in family law or criminal matters.108

Law Aid provides funding solely for the purposes of paying disbursements, including expert’s fees, travelling and accommodation expenses, filing and court fees, jury fees and witness expenses. The scheme does not cover sundries such as photocopying, printing, telephone or postage and does not extend to solicitor-client fees. As part of the arrangement lawyers and counsel agree not to charge unless and until the successful conclusion of the litigation.109

It is a requirement of the lawyer to set out in an attached letter the likelihood of recovery of damages awarded. While all forms of civil litigation are considered, the types of matters generally covered include personal injury claims, claims against institutions involving oppressive behaviour, loss or destruction of property claims, professional negligence claims, and wills and estate claims. Claims involving matters of public interest that will not result in the payment of compensation but are considered to have real merit may also be eligible for assistance.110

Applications for disbursement assistance are available online and will only be accepted from legal practitioners. A non-refundable processing fee of $150 applies to all applications for assistance.111 Applications must detail the financial assets of the client and must be accompanied by a supporting letter from the applicant’s lawyer. Lawyers must accurately assess and estimate the out of pocket expenses for which they seek reimbursement as any additional request or future disbursements will have to be specifically reviewed and approved by Law Aid.112

Applications are assessed by the Fund Manager having regards to the applicant’s financial means and an appraisal of the likely success and merit of the claim. The quantum of funding provided to the assisted person is at the discretion of Law Aid. Law Aid may limit assistance to a fixed dollar amount or to the funding of certain disbursements only, and reserves the right to terminate assistance at any stage of litigation.113 The lawyer is required to report to Law Aid every three months as to progress in the litigation.114

If the litigation is successful, all disbursements paid by Law Aid must be repaid in addition to a 5.5 percent levy on the award or compensation received. Law Aid reserves the right to vary this levy, for example if the judgment or settlement includes a non-monetary component.115 If the matter is unsuccessful, the applicant is not required to repay the scheme but will remain responsible for any costs awarded against them in favour of the other party.

The Western Australian Civil Litigation Assistance Scheme (CLAS) aims to assist plaintiffs who are unable to pay the costs of civil proceedings and who are otherwise ineligible for a grant of legal aid. Grants of assistance cover both professional legal fees and disbursements, including Counsel’s fees where the Counsel briefed has been approved by the CLAS. The CLAS is unable to provide disbursements-only grants. Matters for which funds may be granted include personal injury claims, medical negligence, public liability, dependency/inheritance claims, breach of contract and insurance. Funding does not cover family or criminal law matters, immigration matters, commercial disputes, environmental matters, defamation, prerogative writs and workers compensation matters, amongst others.117

Applications may only be made by private legal practitioners acting on behalf of applicants.118 Unlike the disbursement assistance schemes of other State and Territory jurisdictions, the CLAS conditions of assistance do not require lawyers to work on a pro bono or contingency basis.119 Lawyers accept to work the hourly rate as provided by the Supreme Court Scale of Costs.120 The legal practitioner must also be on Legal Aid Western Australia’s CLAS Panel of Practitioners.121 All applications will be assessed by the Director of Legal Aid, in discretionary consultation with the CLAS Advisory Panel.122 Applications are assessed with regards to the CLAS’s eligibility criteria.123

Eligibility is determined by means and merits tests. Under the former, the applicant’s gross family income should not exceed $80,000 per annum and their assets, such as a house and car, must be of a ‘reasonable value’. Under the latter test, consideration is to be given, amongst other things, to the strength of the claim, any legal or factual difficulties, available documentary evidence and the ability of the defendant to pay any award of damages and costs.124

Eligibility is further confined to permanent residents of Western Australia. The cause of action must have arisen, and the original proceedings must have been or will be commenced, in Western Australia. The applicant must be a plaintiff or proposed plaintiff in court proceedings. Funding will not be granted to a person defending a claim. Funding is available for meritorious appeals from decisions of the Western Australian Supreme Court or District Court.125

Assistance is approved and granted in stages taking into account how a matter will ordinarily proceed before the court. At the end of each stage, the legal practitioner should submit a lump sum account for payment along with a progress report.126

Applicants who are successful in their claim are required to repay to the Legal Aid Western Australia both the entirety of recovered costs, including GST, and a Conditional Fee ordinarily fixed at 20 percent of the judgment amount (excluding special damages). Applicants who are unsuccessful do not need to repay the Scheme, however they may be required to pay the other party’s costs.127 The CLAS may pay these costs at its discretion. Further enquiries about the scheme should be directed to the Administrator, Civil Litigation Assistance Scheme.128

4 For example the 2004 Final Report of the Senate Legal and Constitutional References Committee Inquiry into Legal Aid and Access to Justice referred to anecdotal information that suggested that some lawyers use delaying tactics against pro bono litigants, thus recommending that all courts consider amending their rules to allow lawyers who provide pro bono legal services to recover their costs in similar circumstances to those litigants who pay for their legal representation. See Senate Legal and Constitutional References Committee, Final Report of the Senate Legal and Constitutional References Committee Inquiry into Legal Aid and Access to Justice, (2004), 178-179 at http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Legal_and_Constitutional_Affairs/Completed_inquiries/2002-04/legalaidjustice/report/contents.